U.S. markets were walloped today, as traders were disappointed with news out of Europe, and a number of mixed economic reports were released.
The No. 1 problem today was Mario Draghi’s announcement that, although the ECB will extend its monthly purchase of 60 billion euro ($63.5 billion) worth of bonds into 2017, it will not increase the purchase amounts, as traders had hoped. When markets become addicted to economic stimulus, any reduction is seen as a negative.
In U.S. financial news, the Institute for Supply Management (ISM)’s November was 55.9, a decline from 59.1 in October. Economists were looking for 58.0. Any number above 50 still indicates expansion.
Also in October, U.S. factory orders were up 1.5%, ahead of the street’s view of 1.3%. But the U.S. Labor Department reported that were up 9,000 to 269,000 — topping estimates by 1,000.
Given the , traders are concerned that a rate hike this month could easily throw the economy back into recession.
The Dow Jones Industrial Average was off 300 points intraday, and finished the day down 1.4%, as did the S&P 500. The Nasdaq was smashed the most, losing 1.7%. As was the case yesterday, all sectors were in the red, but today it was healthcare that was the weakest sector, losing 2%.
Strong earnings were still driving many stocks higher, however. Kroger Co (NYSE:KR), Avago Technologies Ltd (NASDAQ:AVGO) and Pure Storage Inc (NYSE:
PSTG) are three who benefited from earnings. Here are the complete details.
Kroger Co (KR)
Supermarket chain Kroger hustled up almost 5% today after reporting third-quarter 2015 earnings of 43 cents per share and revenue of $25.1 billion — ahead of the Zacks Consensus Estimate of 39 cents per share, but below the estimate of $25.2 billion.
Kroger also lifted its guidance for fiscal 2015 from $1.92-$1.98 per share to $2.02-$2.04 per share. During the past quarter, KR repurchased some 853,000 shares of stock for a total of $31 million.
The stock’s action today lifted it above recent resistance at $38 per share, hitting an intra-day, split adjusted record price of $40.33.
Avago Technologies Ltd (AVGO)
AVGO stock was also a big winner today after the cell phone chipmaker of $2.51 per share late on Wednesday, ahead of analysts’ expectations for $2.38. Revenue was 16% higher from a year ago, at $1.84 billion. In addition, full-year EPS were up 83% from a year ago.
Also boosting the stock was the fact that five different analysts raised their price targets for AVGO stock. Topeka Capital Markets boosted their price from $130 to $153 per share. AVGO stock finished the day at $144.88, up more than 9%.
Avago, which boasts Apple Inc (NASDAQ:AAPL) as one of its customers, is also set to acquire fellow chipmaker Broadcom Corporation (NASDAQ:BRCM) for $37 billion.
Pure Storage Inc (PSTG)
Pure storage stock was pure gold today after the data storage company of 18 cents per share, trouncing analysts estimates that the company would lose 30 cents per share.
In addition, revenue increased 167% from a year ago to $131.36 million, well ahead of street estimates for $106.95 million.
This was the first financial results posted as a public company. PSTG went public in October, 2015. The closing price of $15.69 today is still well below the IPO price of $17.00. PSTG stock reached a high of $19.49 a few weeks after going public, but had been drifting lower and broke below $13.00 just a few days ago.
It’s likely that this earnings report will propel the stock higher over the next few weeks. PSTG stock surged 12% today on strong volume of 4.1 million shares.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
